American Dream, the mega mall and entertainment complex located in East Rutherford, New Jersey, reopened about six months ago. There was a lot of developmental planning that went into this complex and hopes were high that New Yorkers would flock to the mall across the Hudson. So far, mall traffic has been less than expected.
The original opening was scheduled for October 2019 and, before it had a chance to establish itself, the pandemic caused it to be shut down again in March 2020. Kurt Hagen, senior vice president of development for American Dream said, according to Glossy, “It would have been much better if American Dream had burned down or a hurricane had hit it. Financially, we would have been covered by insurance, but this pandemic that we did not see coming has not been covered, and it is the worst scenario possible.”
Hagen’s fear of a default on its American Dream loan came true after a cash flow crisis arose due to the pandemic. The developer, Triple Five, defaulted on its American Dream loan. Triple Five had developed the American Dream complex, and prior to that it was the developer of both the Edmonton Mega Mall and the Mall of America in Minneapolis, Minn.
Within the American Dream complex, 1.3 Million square feet, or 45% of the mall’s space, is retail space. Lord & Taylor, Barneys New York, Century 21, and The Gap have pulled out of the mall; some because of bankruptcies and others because of a lack of confidence. Right now, traffic is only 25% of what was expected.
It is important to note that the entertainment part of the American Dream Mall occupies 55% of the space and includes a waterpark and an indoor ski slope. Those activities should certainly be an attraction for people and entice them to flock to the mall. However, tickets range up to $44.95 a person. For a family of four, that could be close to $200 – and that is before they do any shopping.
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But will they come?
Saks Fifth Avenue announced that its store will open this coming September. That is a vote of confidence by the luxury store. While this is a delayed opening (a delay that can be attributed to the pandemic), it adds a respected anchor to the center. The Saks Fifth Avenue store in Short Hills Mall has been closed, and a unit at the Shops at Riverside in Hackensack has also been shuttered. This will be the only Saks Fifth Avenue store in New Jersey and should be an attraction.
I think that the mall operators hope to attract New Yorkers to cross the Hudson River and come to the mall to shop and to enjoy the entertainment park. New York City pre-pandemic was a mecca for shopping – with everything from Macy’s
Sure, young people will schuss down the slopes of the ski slope. As a counterpoint, people will swim in the large pool. But, how many will be back for a second time and include shopping in their visit?
I think the location and the retail mix of American Dream is wrong. There is no easy way to get to the mall, and there is a disparity between the stores as they lack a uniform appeal to a segment of the shoppers. Saks Fifth Avenue is positioned to serve the high end customer while other stores, like Amazon’s
I think that American Dream is America’s nightmare.